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Commentary: Is the natural-gas story ready to transform?

“Natural gas is the ugly duckling of the commodities,” said Ben Smith, president of First Enercast Financial, an information vendor serving energy markets.

But just like the beloved Hans Christian Andersen fairy tale, the natural-gas story has the potential to transform — if investors are patient enough to wait.

Many commodities had seen a downtrend since the peak in prices in 2008, but copper, gold and agricultural commodities have been making new highs, and oil and iron ore have rebounded, said Evan Smith, co-manager of the $900 million Global Resources Fund, which climbed 38% last year.

“Natural gas is probably the only commodity that has set lows recently, with no rebound,” he said.

At the same time, the natural-gas market has had about $28 billion of capital come in over the last couple of years, in the form of joint ventures, largely from foreign oil companies such as India’s Reliance Industries Ltd. or France’s Total S.A. he said.

There’s too much capital coming in from foreign oil companies, and this “has largely led to continued drilling, which keeps the supply higher than it should be,” he said. And it could take a year before the market sees an incremental decline in drilling activity from companies reducing capital commitments to drill natural gas.

The oil patch is a world of risk takers, but few are as daring as Charif Souki, the chairman and chief executive of Cheniere Energy.

A decade ago, Mr. Souki warned of an impending natural gas shortage, and set out to build a network of gas import terminals after none had been built in a generation. He lured Chevron and the French oil giant Total into signing long-term use agreements, and Cheniere’s stock price rocketed from less than $1 a share in 2002 to more than $40 in three years.

But the sudden boom in gas drilling that took off around 2005 created a glut, ruining Mr. Souki’s dream. Cheniere’s stock price collapsed to $2. And he managed to complete only one terminal, at a cost of $1.4 billion, that stands idle much of the time.

Now he is trying to recoup his investment by making the opposite bet: that he can profitably export cheap American natural gas to Europe and Asia, where prices are roughly twice as high.